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Inovio (INO) Down 5.8% Since Earnings Report: Can It Rebound?

Zacks Equity Research
Updated

It has been about a month since the last earnings report for Inovio Pharmaceuticals, Inc. INO. Shares have lost about 5.8% in that time frame.

Will the recent negative trend continue leading up to its next earnings release, or is INO due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Inovio's Q1 Loss Wider than Expected, Shares Down

Inovio reported a loss of 36 cents in the first quarter of 2018, wider than both the Zacks Consensus Estimate of a loss of 27 cents and the year-ago loss of 31 cents.

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Inovio reported revenues of $1.5 million in the first quarter, missing the Zacks Consensus Estimate of $8 million. Revenues declined in the quarter owing to some accounting adjustments and decrease in grant funding recognized from Defense Advanced Research Projects Agency (DARPA) Ebola grant. Also, in the year-ago quarter, a termination payment rom Roche was recognized as revenue which was missing in the first quarter of 2018.

Research and development expenses inched up 0.4% to $24.6 million, owing to the ongoing studies for its most advanced pipeline candidate VGX-3100 and activities under the company’s collaboration with AstraZeneca’s subsidiary, MedImmune and an increase in employee headcount to support clinical study activities and partnerships. 

General and administrative expenses rose 24.4% to $9.7 million, primarily due Chinese taxes and advisory fees incurred in connection with the upfront payment received from ApolloBio in Jan 2018.

In January, Inovio entered into a license and collaboration agreement, providing ApolloBio Corporation with exclusive rights to develop and commercialize VGX-3100 and HPV within Greater China (China, Hong Kong, Macao, Taiwan).

Pipeline and Other Update

VGX-3100, an HPV immunotherapyis currently being evaluated in a phase III study for the treatment of cervical dysplasia, caused by HPV. The company is also conducting a phase II study to examine the efficacy of VGX-3100 for HPVrelated vulvar neoplasia.

In mid-2017, the company started an independent phase I trial on DNA immunotherapy, INO-1800, against hepatitis B virus, after Roche backed out from its collaboration agreement in July 2016. During the first-quarter conference call, the company announced that it plans to report additional data from this study at upcoming scientific conferences and in a publication in 2018.

The company will be opening sites for phase I/IIa study to evaluate the immunogenicity and preliminary clinical efficacy of INO-5401 and INO-9012 in combination with Roche’s Tecentriq (atezolizumab) in participants with locally advanced unresectable or metastatic/recurrent urothelial carcinoma (UCa).

The company is also opening sites for phase I/II study to evaluate safety, immunogenicity and preliminary efficacy of INO-5401 and INO-9012 in combination with Regeneron’s cemiplimab in participants with newly-diagnosed glioblastoma.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.

Inovio Pharmaceuticals, Inc. Price and Consensus

 

Inovio Pharmaceuticals, Inc. Price and Consensus | Inovio Pharmaceuticals, Inc. Quote

VGM Scores

At this time, INO has a subpar Growth Score of D. Its Momentum is doing a lot better with a B. The stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

The company's stock is suitable solely for momentum based on our styles scores.

Outlook

Estimates have been broadly trending downward for the stock and the magnitude of this revision indicates a downward shift. It's no surprise INO has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


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